Please excuse the error in the email blast. If you meant to go to the newest podcast, please click on this link.
The question seems as obvious as the sun in the sky. Our company can make more money if we can find skilled workers to run our machines. Where are they?
What if that is the wrong question?
What if there were a dozen questions and the simple, straightforward one was leading you into a brick wall?
What if a better question was how much will it cost to hire the skilled workers I need?
If I paid workers 50 percent more than what I am currently paying, would it do damage to my business or enable it to grow? How much would an increase in labor costs hurt the company or enable it to acquire additional opportunities?
I do not know the answer for every business. Each company must ask the question themself and decide whether to take the gamble to discover the answer.
***
A follow up question could be should I try hiring a more diverse group of people? Maybe people “on the spectrum,” with varying degrees of autism, or folks in wheelchairs, people with MS, or cerebral palsy. What about applicants with seizure disorders, Down syndrome, blindness, or deafness? Applicants with jail records?
Another idea might be to recruit office workers or people who could only work limited hours because of child care or parent care obligations.
***
Another question to consider is whether I’m using my current equipment just because I already own it. Should I be thinking of alternate ways of making the product?
We are seeing such dilemmas increasingly in our machine tool business. Rather than buying million dollar CNC equipment that can make finished parts on one machine (slowly), some of our customers are blanking parts first on a Hydromat, or screw machine, or cold former and then finishing them on a drill and tap machine or a simple lathe with a robot loader. As we see AI join the machining world, this solution is likely to become more common.
Another approach could be to outsource the parts to somebody else better and faster than you are.
***
Finally, there is the radical idea to pick up and move the company. If in Illinois there are no workers to be found, or the real estate taxes are absurdly high, or people are shooting at each other on the way home, I could consider Indiana. If Los Angeles or San Francisco cost a fortune for a house, maybe Nevada or Idaho is a better option.
The beauty of America is that it is friendly to novel answers to old problems and not afraid of change–except in politics.
***
One approach I have used when I am stumped is to ask myself, “What is the obvious wrong answer?” And then I try it out.
As stupid as it sounds, sometimes it actually works.
Question: What ideas have you implemented or thought of trying to solve the worker shortage problem?
5 Comments
It seems as the cost of skilled labor goes higher, there is also intense pressure to lower your prices just to get jobs. That’s a dangerous combination that may end in the deaths of many precision machining businesses. Many large customers have made the investment in machines and people (including additive manufacturing) to make their own parts and tooling. What’s left is small batch and specialty jobs, of which there are not enough to go around. In our case, the machines are getting long in the tooth but are still highly productive (and paid for) so there is every reason to keep using them. What’s lacking is a simple way to connect with appropriate customers. Sophisticated online quoting and production services are scooping up lots of work, but where is the friendly online exchange that can match local demand with suppliers who do not have newer facilities with banks of robot loaded 5-axis machines and internet marketing skills? You can post machining services on Craigslist and explain how you make awesome parts at lower cost, but you won’t find any customers looking for you there. Purchasing managers, where can I find you online?
Well thought out comment Lawrence. A suggestion, go to shows, join groups, use serendipity, hire somebody to hit the phones, maybe a college student, buy some inexpensive advertising like on the TMW website, knock on the doors of your neighbors. If you think about it somebody with your smarts can think of 5 people to call each day at least.
It is the wrong question Lloyd, andhigher wages is the wrong answer to that wrong question.
If only the issue were money, than your squeeze of the ball to give the currently unavailable skilled workers more money would have them materialize immediately. T hey won’t because they aren’t out there. but lets look at your money argument first. The Real Median Personal Income in the United States is $18.04/hour; $37,522/yr. , according to the 2021, US Census. (This is not including Overtime, Medical, Fringe or other benefits.) here’s the link: https://fred.stlouisfed.org/series/MEPAINUSA672N. So for any one working in our shops making more than $18.04 per hour, they are already at the US MEDIAN PERSONAL INCOME. That is solidly Middle class, and if that is insufficient, for the skills and value I do not know what it would take, but it would likely be economically unattainable.
If this “skilled worker shortage ” were a US only issue, than we might agree that it might be solvable with higher wages, But I just returned from a week in Germany speaking with many, many machining pros from around the world. the issue is so troublesome in Germany that they have started a kind of hybrid system where workers that have completed their apprenticeship in another field- perhaps baking- can come to an employer with a program and skip much of the intro stuff and focus on the actual skills needed for their new craft. This kind of pivot is totally with out precedent in that country. If the Germans have the same problem, is it because they too are supposedly underpaying for skills? I think not.
The issue with the missing skills is a different issue than the issue of missing skilled workers, if in fact there is one. Frankly, I doubt that many skilled people are AWOL from employment. (Except for retiring Baby- Boomers, and that is just where the demographers have always said it would be.) The current White House seems to agree that there are not a lot of missing workers: https://www.axios.com/2023/04/17/no-more-missing-worker-problem-say-white-house-economists.
So the challenge really boils down to “what are you doing to help candidates in your your community find the Above Median Income Opportunities available to them in your shop?” If you have occupations currently paying above that $18.04 hourly rate (Plus benefits, overtime, etc, etc, )- It ain’t the money. Its our failure to explain the value we provide for the value our performers provide.
Getting clarity on identifying the real issue is an important first step in problemsolving. The current white house says there are no missing workers. most occupations in our shops are above the Real Median US personal income. We don’t need to offer more money. We need to find the people that aspire to earning a US REAL MEDIAN Personal Income. What are we doing to do that ?
Back in the old days and still alive in places, we grew our own employees. Ford Motor took me in as an apprentice and taught me what I needed to know to be a profitable contributor. All my interesting work in manufacturing was preceded by employers that trained me. When I was a kid I had jobs where the employer knew that I knew very little, and they shouldered the small expense to personally teach the job, the product, the business concept. Trying to hire expert-ready employees became a trend that goes nowhere (where we are now). This is a good moment to consider making your own experts, teaching young (and old) the tricks of the trade. It’s a good investment.
Lloyd,
To find the answer to the title of your article we need to lock into the principal causes of this shortage. The loss of common sense and erosion of our K-12 achievement level. Various organizations now rank the USA 14th to 17th out of over 50 nations. The countries with better ranking are our toughest trade competitors.
Public school ranking for the top 5 states is over 60, whereas the score from 26 to 38 applies to the bottom 5 states. College is out of question, so wo is going to offer a job to students from these low ranking states?
It seems that the cost to hire skilled workers is secondary, first you have to find them.
That said, business and industries do very little to help themselves.
Boeing Everett plant employs over 30.000 persons. Apprentices have a choice of 15 occupations. The industrial electronics maintenance class had 5 graduates in 2015 which lets me assume that Boeing graduated about 75 apprentices in 2015.
The Swiss builder of the PC-24 business jet and PC-12 turboprop air-ambulance, Pilatus Aircraft, has a facility in Bloomfield CO with 120 employees including 8 apprentices in 3 different occupations. You do the math!
The beancounters refuse to invest in education they rather maintain a large budget for headhunters. Company executives hide education costs from the stockholders who prefer high dividends over skilled labor which then may or may not properly installs the Boeing 737 vertical stabilizer.
The Swiss apprenticeship system does maintain its highly skilled workforce which outproduces the rest of the world. I am forever grateful for my technical and business knowledge gained during my apprenticeship.
Still love to share my knowledge with machinists, engineers and executives since my arrival in the US in 1962.
Proud of my 25 year activities with NIMS to provide our skilled workers with the certifications they deserve.
Still serving on the board of the Waterbury CT MASC trade school founded in 1996 by a bunch of local screw machine shop owners. We started with cam machines, now it is all CNC machines including a robot operated injection molder.
Teaching is my hobby,
Paul Huber